Search canberratimes:

Search in:

New Citigroup CEO cuts 11,000 jobs

US banking giant Citigroup's new chief executive on Wednesday announced a cut of four per cent of its global workforce, less than two months after a shock board move forced out CEO Vikram Pandit.

Michael Corbat, who took the lead of the mega-bank on October 16, said it would slice more than 11,000 jobs, mostly in its global consumer banking division, and take a $US1 billion charge in the 2012 fourth quarter and another $US100 million in the first half of next year.

Investors welcomed the news: the shares gained 6.5 per cent to $US36.50 in early afternoon trade.

Citigroup said it would "significantly" scale back operations in Pakistan, Turkey, Paraguay, Uruguay and Romania. Other markets affected by the cuts include the United States, Brazil, Hong Kong, South Korea, and Hungary.

It is understood Citi's staffing and operations in Australia will undergo only minor changes.

"We will continue to offer the full range of products and services and our commitment to the market in all products and areas remains the same," Citi's Australian spokesman Steven Blaney said. "We see Australia as a very important and key market, which we are doing very well in and will continue to grow and invest in."

Mr Blaney would not put a number on how many jobs may be lost in Australia as part of the global scaleback, but said that Citi "constantly review [its] business model to ensure it meets with market conditions".

"If that requires some minor changes in particularly areas, that will be done. But the business has been consistently reviewing its operations to make sure that it is running a very efficient operation in this market.

Around 6200 of the global job losses will be in the consumer banking division as Citi pushes a strategy of focusing on the 150 cities around the world "that have the highest growth potential in consumer banking."

"While we are committed to - and our strategy continues to leverage - our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns," said Corbat.

"And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations."